| the analysis of a substance in order to ascertain the nature of its chemical constituents. |
| qualitative analysis n. The testing of a substance or mixture to determine its chemical constituents. |
Qualitative Analysis
Securities analysis that uses subjective judgment based on nonquantifiable information, such as management expertise, industry cycles, strength of research and development, and labor relations. This type of analysis technique is different than quantitative analysis, which focuses on numbers. The two techniques, however, will often be used together.
Investopedia Commentary
While most investors and analysts rely largely on quantitative measures, metrics such as the debt-to-equity and price-to-equity ratios, supplementing the analysis with qualitative analysis increases the insight into the company. Using qualitative factors will often give analysts an edge since key factors, such as management, does not show up in quantitative analysis.
To help you remember, qualitative = qualities of a company.
Related Links
Competitive Advantage Counts
Guide to Stock-Picking Strategies
See also: Fundamental Analysis, Quantitative Analysis, Soft Metrics, Valuation
qualitative analysis qual·i·ta·tive analysis (kwŏl'ĭ-tā'tĭv)
n.
The testing of a substance or mixture to determine the characteristics of its chemical constituents.
